HND Economics 2 The World Economy世界經(jīng)濟學報告第二篇

HNDDE3H35Economics2:TheWorldEconomy

CONTENTS

Introduction 2

Mainbody 2

Benefitsofinternationaltrade 2

Freetrade 2

Comparativeadvantage&Absoluteadvantage 3

Barrier&protectionism 3

WTO 4

EU 5

Balanceofpayment¤tbalanceinUKoverthelast30years 5

Exchangerates 8

Advantages&disadvantagesofUNandsinglecurrency 8

Characteristics&issuesofLessdevelopmentcountries 9

MultinationalsfirmonLDCs 10

Conclusion 10

Reference 11

Appendix 12

Introduction

Anexportbrandmanagerwiththeheanalysisofexternalenvironmentandtheexistingcurrentsituationproblemscandevelopamarketingplanfornewproductfortheboardofdirectors,infuturedays.Thereportwillanalysisfromtheviewofmicroandmacroaboutexternaleconomicalenvironment,theobjectivecurrentsituationabouttheproblemsandthedirectionofdevelopmentforcompany.

Mainbody

Acompanyshouldhaveaclearvisionabouttheinandoutbusinessenvironmentforexploringthebiggermarketshareandmorebenefits.Asanexportbrandmanagerisnotonlytostudythechangingsurroundingsandfiercecompetitionbytheviewofmicroandmacrobutalsotoseethedefeatsaboutourbrandandfallbehindthemanagementofothercompetitorsastimeshavechanged.First,Iwillviewonthemacroabouttheinternationaltrade.freetradeandsoonaboutthemacroeconomytoknowclearlyabouttheglobalworld.

Benefitsofinternationaltrade

Intheworld,becomingaglobalization,theinternationaltradeinmoreandmoreimportantforcountriesandregions.Inthebackgroundofglobal,exchangingofcapital,goods,andservicesacrossinternationalbordersorterritories/wiki/International_trade

,companyorindustriestoincreasethedomesticcompetitiveness,decreasethecostofthegoodsandservicesandgaintheglobalmarketshare.Internationaltradeisaengineforeconomyincreasing,andtheeconomydevelopmentisimprovethedirectionoftheinternationaltradeandfloatinginternationalcapacity,alsoresultingthedevelopmentofmultinationalfirmsandeconomicalglobalizationwhichinteract.Forexample,China,undertheneedsandpromotionsofinternationaltrade,theserviceofChinahasbeguntodevelopafter1980.Theareaofexportingserviceonlyoccupiedfrom2.7billionin1982to5.748billiondollarsin1990underinternationaltrade.Frominternationalstatistics,internationalservicetradeinChinahastakenupfrom0.37%in1990to3%in2004,andin2006,ourcountryhasbecometheNO.8exportingservicecountryontheworld.<internationaltrade>in2007p3

Freetrade

Freetradeisasysteminwhichthetradeofgoodsandservicesbetweenorwithincountriesflowsunhinderedbygovernment-imposedrestrictions.AboutEU,acomparativefreetradeareaonagriculture,commercial,transportationandmonetaryandsoonbetweenthemembers,iseliminatingofcustomsdutiesandquotasonimportandexportsofgoodsbetweenmemberstates.

Asaexportbrandmanagershouldconcernthatfreetradewouldpreventdevelopmentofourcompanybecausetheycouldn’tcompeteandmightdominatecountryeconomically.Consideringthemultinationalfirmsisanunavoidablepartforus.Thefreetradeforacompanyisbeneficialandthatglobalmarketthatwecurrentlyliveinandbenefitfromwouldseemtosuggestthatitisso.Thebiggerchoices,thelargermaterialfromothercountiesandmoreconsumersforourcompanyareattheareaoffreetradeeventhoughthefiercecompetitionisinevitable.However,completefreetradeissuchabigchallengeforthedomesticfirmscompetingwithothercompaniesshowinggreatstrengththatexistingcountriessetthebarriersandtarifftoprotectthedomesticindustries.

Comparativeadvantage&Absoluteadvantage

Ineconomics,comparativeadvantagereferstotheabilityofapersonoracountrytoproduceaparticulargoodataloweropportunitycostthananotherpersonorcountry.

Absoluteadvantagemayrefertotheabilityofaparticularcountrytoproduceaparticulargoodwithfewerresourcesthananothercountry./wiki/Absolute_advantage

Forexample,theCanadamaybeabletoproducenewsprintpapermoredominantthansayJapanonmaterialandtechnology.However,Japancanproducehigh-techproductmoreefficientlythanCanadaonlaborforceandindesign,productionandmaintenanceservicemorepreponderant.Eachaspecthasitsowncompetitionontheirefficientproductstowinmorebenefitsforthecompany.

comparativeadvantage“evenmoreacountryhasanabsolutelyadvantageoveranothercountryintermsofcommoditiestheywishtotradeitwillstillbetotheirmutualadvantagetotradeprovidingeachcountryhasacomparativecostadvantage”,DavidRicardo,BritishEconomistin1087

whichreferstotheabilitytoproduceaparticulargoodataloweropportunitycost.ThereisainternationaltradebetweenSpainandUKaboutwineandwoolen.ComparedwiththewineproductioninUK,WoolenproductioninUKhascomparativeadvantage.ThoughSpainhastheabsoluteadvantageaboutbothofthem,comparewithUK,thecostofwooleninSpainismoreexpensivethanthecostofwineintherewhichcanexchangeUKwithproducingofwoolentousethelowercostresultingthehighbenefits,calledatlowopportunitycost.

Exportingisnotfocusingonthequalityofexportproductsbutshouldknowtheimporterpermitswhetherallowyoutoenter.Asaexportbrandmanageshouldknowclearlyaboutthequalityproductionstandardsandthetradeprotectionismandtradebarriers,andwhatorganization,suchasWTO,shouldbelookedforaftermeetingthetradebarriertoseekforthebestsolutions.

Barrier&protectionism

Protectionismistheeconomicpolicyofrestrainingtradebetweennations,throughmethodssuchastariffsonimportedgoods,restrictivequotas,andavarietyofotherrestrictivegovernmentregulationsdesignedtodiscourageimports,andpreventforeigntake-overoflocalmarketsandcompanies.Thispolicyiscloselyalignedwithanti-globalization,andcontrastswithfreetrade,wheregovernmentbarrierstotradearekepttoaminimum.

Avarietyofpoliciescanbeusedtoachieveprotectionistgoals,suchastariffsandimportquotas.

Tariffs:Typically,tariffs(ortaxes)areimposedonimportedgoods.Tariffratesvaryaccordingtothetypeofgoodsimported.Importtariffswillincreasethecosttoimporters,andincreasethepriceofimportedgoodsinthelocalmarkets,thusloweringthequantityofgoodsimported.Tariffsmayalsobeimposedonexports,andinaneconomywithfloatingexchangeratesexporttariffshavesimilareffectsasimporttariffs.However,forpoliticalreasons,suchapolicyisseldomimplemented.

ImportQuotas:physicallimitationonquantityofimports.<Economics2:theworldeconomy>p41

Chinaisthebiggestcountrytoproducethelaver;Japanistheworld'sbiggestlaverconsumers,annuallaverconsumptionquantityreaches100milliontickets.Atpresent,thereisnoapieceoflaverofChinatoentertheJapanmarket,theJapanesegovernmentisprotectingitslocallaverofindustrialdevelopment.Formanyyears,theJapanesegovernmenthasbeenputthedrylaverandseasoningslaverintoimporttariffsofproductcatalogue,throughthehighlyrestrictedmethods,suchasimportquotas,origin,setupbarrierstotlimitthelaverfromChinaintoJapanmarket,whichobviouslydiscriminatorypracticeviolatestheWTOagreementsrelated./display/displayInfo.asp?IID=200504040902231859

Then,existingtariffswillrequiretheexportingproductshavingmorehigh-technicalrequirements,pastthemoreserioustestingprojects,whichwouldresultthebigdisparityofproductionstandardandraisingtheexportingthreshold.SotheresultisgrowingthepriceofproductionsbyExportingCompanyandincreasingthecostoftrade.Theterrifiesisexistingforlimitingthenumberofimportingproductsbysomeallkindsoftechnicalregulations,standards,andconformityassessmentproceduresandsoonwhichwillraisethetradedisputes.Forexportcompany,withthedevelopmentofscienceandtechnology,mustrealizetoleapthosetariffs,itmustmakeitsproductsaccordwiththetechnicalrequirementsoftheimportingbyusingeveryconceivablemeans,whichmustrisecostofcommodityandtrade.

American(Chinatextileimportquotasontextile)istoprotectitslong-termprotectionofdomestictextileindustry.ItisalwaysimplementingimportquotasonChineseclothing.Inagreementontextilesandclothing(ATC),theprotectionperiodwaslasting10years.Butthisdidnotrealize,becausetheUnitedStatesisnotwillingabolishquotasonChinesetextilesandcombinatedothercountriestolimitChinesetextiles.TheypublishedafairdealinIstanbul'sdeclarationoftextilesandclothing,textilesimportquotasonChineseclothingextending2years.Thisactionisinordertoenlargeexportmarketforortolimitforeigngoods,orfortheirproductcompetition.Ifstrengthentheimporterbystrictsupervisionortofittherequirementoftheforeignexchangesupervision,sotheimportersarelimitedthequantityofimportingorvalue.

WTO

TheWorldTradeOrganization(WTO)isaninternationalorganizationdesignedtosuperviseandliberalizeinternationaltrade.TheWTOcameintobeingonJanuary1,1995,andisthesuccessortotheGeneralAgreementonTariffsandTrade(GATT),whichwascreatedin1947,andcontinuedtooperateforalmostfivedecadesasaninternationalorganization.TheWTOhas153members,whichrepresentsmorethan95%oftotalworldtrade.TheWTO'sheadquartersisinGeneva,Switzerland.AmongthevariousfunctionsoftheWTO,themostimportantonesare:Itoverseestheimplementation,administrationandoperationofthecoveredagreements;Itprovidesaforumfornegotiationsandforsettlingdisputes./wiki/WTO

Sino-JapaneselavertradenegotiationsfromApril22,2004,afteroneyear-long,AfterJapanandChinagovernmentswithtricycleconsultationswiththehelpbyWTO,finallytheJapanannouncetocanceltheimportoforiginlaverafterthree-wheelconsultationsintheend.ThisisthefirstinitiativeafterChina'saccessiontotheWTOrulesbywinningtradebarriersinvestigationcases./jm/jmfl/dljj/200706/t20070630_183625.htm

Eventhough,thiscasehasapositiveimpactforthecompanyinChina,attackisanunavoidableproblemforones.Thiscourseisanimportantquestion.Withthelowertariffs,quotaseliminaterestrictionsonenterprise,governmentsubsidies,andservicesoftheenterpriseopeningforforeign,whichwillattacksomeenterprises.itisverynecessaryfordomesticenterpriseshowtoadjustintransitionperiod,adapttothemarketeconomyenvironment,itisverynecessary.

Buttheattacksaretemporary,whichisforsomeenterprisespeciallytheheightoftheenterprise'sprotectionbythegovernment.Infact,weareintheWTO,enterprisesarefacinghowtoliveinabusinessenvironment,whichispointshouldbeconcerned.

EU

EUisapoliticalandeconomicunionoftwenty-sevenmemberstates,locatedprimarilyinEurope,headquarteredinBrussels,Belgian.ItwasestablishedbytheTreatyofMaastrichtin1993uponthefoundationsofthepre-existingEuropeanEconomicCommunityandfoundedtoenhancepolitical,economicandsocialco-operationbetweenmemberstates.Inthere,thegoods,service,agriculturalandfundscanflowfreely,andtheeconomyisincreasingrapidly.EUhasgreaterandgreatermarketsizeandcapacity,whichisnotonlybecauseoftheneweconomictojointhestage,andisthelargestexporterintheworldofcapital,goodsandservices,plustherelativelytolerantofforeigntechnicalexchangesandcooperationanddevelopmentpolicy,withtherestoftheworldeconomydevelopment,especiallydevelopingcountriesincludingChinaisveryimportant.

Requiringlookingbackthepreviousthetopicsaboutthetradeinserviceandtradeingoodsandthetableregardingthebalanceofpayment,wewillhaveaclearobjectivetodevelopourselvesbrandsandexpandthemarketshares.So,followingthebalanceofpayment,andexchangerateswiththeanalysisareinUKoverthelast30years,andwithsomeexamplestoexplainclearlytherelationshipbetweentheexchangerateandthebalanceofpayment.

Balanceofpayment¤tbalanceinUKoverthelast30years

Itistherecordofallfinancialtransactionsbetweencountryandtheinternationaleconomy.ThebalanceofpaymentisconsistingofCurrentaccount,Capitalaccount,financialaccountwhichdealswithflowofdirectportfolioandinvestmentreserveassetsandInternationalinvestmentpositionshowingtheStockofExternalFinancialAssetandLiabilities.

Thecurrentaccountisoneofthetwoprimarycomponentsofthebalanceofpayments,theotherbeingthecapitalaccount.Itisthesumofthebalanceoftrade(exportsminusimportsofgoodsandservices),netfactorincome(suchasinterestanddividends)andnettransferpayments(suchasforeignaid).Fromthechart,thecurrentbalanceisthelowest-15.9inthefirstquarterof2007,whentheincomeisleastallofthequarterat-0.7,andtradeingoodsisnotsowellatoneofthesmallestofthose.TheleastpresentofthecurrentbalanceaspercentofGDPis-4.5%thefirstquarterin2007.

Thecapitalaccountisoneoftwoprimarycomponentsofthebalanceofpayments,theotherbeingthecurrentaccount.ThecapitalaccountisreferredtoasthefinancialaccountintheIMF'sdefinition;theIMFhasadifferentdefinitionofthetermcapitalaccount.Thecapitalaccountrecordedasurplusof￡1.1billionforthesecondquarter,littlechangedfromthesurplusinthefirstquarter.

Financialaccountshowsanetinflow(inwardinvestment)￡9.1billionointhesecondquarter,comparedwiththepreviousquarter;netinflowis￡6.5billionpounds.Inthelatestquarternetforeigninvestment,reduce￡326.1billion,thisisthehighestrecord,inthefirstquarterinthenetinvestment￡291.9billionpounds.AndintheUKreduce￡317.0netinvestmentinthesecondquarter,calledthehighestrecord,itisinthepreviousquarterafterthe￡298.3investment.(ViewontableD)

￡Billion

from<PinkBook>

Since1984,UKhadalwaysbeendeficitineveryyear.From1987thedeficitwasexpandingfrom

-8billionto-11billion,thenthesecondphasefrom1992to1997,thesituationofpaymentisrecoveryto-1billionwhichisgoodviewforUKincurrentpayment.Focusonthe2007,thepaymentwasfacingthedisasterwhichisthecurrentaccountrecordedinnearly-52billion,aboutthebiggestdeficitduringthisperiodincreasingalmost5timeswith1987.

￡Million

1986

1991

1996

2001

2006

Exportofgoods

72997

103939

167196

189093

243635

Exportofservice

26709

34723

61851

87773

132749

importofgoods

82614

114162

180918

230305

319947

importofservice

18527

28411

27539

70573

99641

Balance

–3614

–10615

–962

–18657

–52568

from<PinkBook>

Fromthechart,wecanseetheimportofgoodsandexportofgoodsareallsignificantincreasingineveryyearidentified.However,thedeficitisinevitableingoodsoftrade.LookingattheCurrentAccountwenoticethatIncomehasdecreasedrapidly,andnegativelygrowasmallof￡85millionin1986tonegatively￡665millionin2007,thedifferenceisalmost590million.However,betweenthoseyears,thefluctuationofincomeisinstable,especiallyin1997,1999,2000,2001,2002,2003and2004throughyearstheincomehasapositivegrowthto150millionand250million.TheTradeinGoodsandServicehassignificantincreasedfromnegative1435millionin1986topositive590million,whichhasgrowabout2000millionin2007.Theresultisadeficit,52568millionin2007,existingwhichisgrowingfromnegative3614millionin1986nearlyless2timesthanthatofin2007.ThecurrentAccountBalanceongoodandserviceintheUKEconomyusuallyindeficitsupportingbyBalanceofTrade.<viewonappendixA,B,C>

Britisheconomictrendsshowasignificantincreaseinthebalanceoftradedeficitoverthelast30years.Eveninincome,althoughincomeincreasedsignificantly,notenoughtoovercomethedeficit,andthereforecurrent-accountsurplusisusuallyindeficit.

Howeverinthecapitalaccount,thesedeficitsareusuallyconsideredasthereasonablebalanceofexcessfigures.Therehasalsobeenamorerelaxedattitudeinanycircumstancestothebalanceofinternationalpayments.Theconclusionisthat,despitethedeficitisnotparticularlyadvisable,ifitisrelativelyeasytofinancial,thereisnorealreasonforthisproblemexistingintheUKeconomy.Britainisalreadyinthepast10yearsshowsthemostconsistentgrowthandthisisveryhelpful.

Exchangerates

Floatingexchangeratesrefertopriceofthecurrencyisdeterminedbytheforcesofdemandandsupply.<Economics2:theworldeconomy>p107

Floatingexchangeratescouldhaveinfluenceonthecompany,thedecisionsofgovernmentandexportingandimporting.Forcompanyaboutexportingandimporting,nomatteritincreaseordecrease,willeffectonthepriceofexportingproductionsandsomeinvestmentfromothercountries.ThemechanismreformoftheRMBexchangerateinourcountryisabigshockforhavinglongbeenadaptedtothefixedexchangeratesystemofsmallandmedium-sizedenterprises.First,basedonthechangeofrelativevaluebetweenRMBandpounds,havingimpactonpricecompetitionofimportandexportcommodities;Secondly,thefloatingexchangeratesystembringsmoreriskforforeigntradeofsmallandmedium-sizedenterprise,whichrequiresthesmallandmedium-sizedenterprisesimprovetheabilitytoresistexchangeraterisk,perfectingtheexporttradeintheimportandexporttradeprocesscontinuously.Generallyspeaking,localcurrencyexchangerateisdecreasing,namelymonetaryvalueofcurrencyforforeigncurrencyistobedepreciated,whichcanpromoteexports,restrainimport;Ifacurrencyexchangeratestorise,namely,theforeigncurrencyrisingcurrency,whichisconducivetoimportexport.Then,theexchangerateswillimpactonthedecisionofgovernmentonexportandimportofforeignexchange,exportandimportofcapacityandexportandimportofgoldtorealizetheirbalanceofinternationalpayments,exchangeratestability,arestrictedandstabilityfordomesticprices,etc.

TheEuropeanUnionisoneofthegreatesteconomicorganizationeverhadrecordedhistory,regardlessofitseconomicmeasure,politicalmeasuresandagriculturalmeasuresareworthdiscussing,researchingandstudying.Faultsinevitablyexisting,butstillcan'tignorehisstrengthswhichbringthebenefitsforcountries,governments,companyandpeople.ToknowdeeplyUKisanunavoidabletopicforanexportbrandmanager,alsoitssinglecurrencywhichwillworkforourproductandsalesofbrand-newadbusiness.

Advantages&disadvantagesofUNwithsinglecurrency

Singlecurrencyforacountry,whichwillhavefunctiononcurrencymovement,anddecreasingtheinstabilityofexchangerate,isbigchallengeforStateautonomyofacountry.Losingthedecisiononcurrency,tousesinglecurrencycannotcontrolthechangeofcurrency.FocusonEuro,singlecurrencyhelpsthemembersrestricttheeconomiccrisis,towinthehugestrategicinterestsforUN.AdditionaltomembersofUNusingthesinglecurrency,notonlypromotingEuropeaneconomicintegration,butalsopromotesthefusionofEuropeanculture.However,thesinglecurrencyalsofacesthecrisisonindependenceofnationalcultural,andwillgraduallydisappearbyassimilation.

Forcompany,ifthepriceofgoodsandservicesinthesamecurrency,singlemarketcompetitivenesswillbegreatlystrengthened,thisisgoodfortheEuropeanUnion.Therefore,thesinglecurrencyhelpstostimulateeconomicgrowthandjobs.Anddecreaserisksofinvestment,costofmaterialswilldecrease,theequipmentwillbemorehigh-techandlowerpriceandsoon.

Forindividual,asinglecurrency,afterthepeoplewithintheeuroareatotravelabroadwithoutmoney,canreducealotoftrouble.Therewillnobankchargesonforeignexchangetradingpriceandpaythefees,sotransferpaymentbecomesmoreconvenient,safety,save,thesmallgainsmorebetweeneverymember.Forenterprisesandconsumers,asinglecurrencymeansdon'tworrycommoditypricinguncertainty,becauseofexchangeratefluctuations,willcompletewipeprofitmarginsinacoupleofhours.Therecouldbemoreconvenientwithtourismandshopping,atthesamethevaluablecollectionofEuroisdecreasing.Biggerselectionofgoodsforcustomerswillbuymoregoods.

Inanincreasinglyglobalinternationalenvironment,whetherinthedevelopedcountries,theunderdevelopedcountriesorthelessdevelopmentcountries,whichisthepotentialconsumermarketweshouldtoknowandresearch.Ofcoursemultinationalenterpriseshasbecomeaglobaleconomyshouldnotbeignored.

Characteristics&issuesoflessdevelopmentcountries

LessdevelopmentcountriesareusuallyfoundinAfricaandAsia<Economics2:theworldeconomy>p142

,examplescouldbeBangladesh,whichhashighunemployment,lackofmobilityinworkforce,underdevelopmenttrapandindebtedness.Becauseofthelackofhigh-technologyontheskills,thechaoscausedbywarandthebasicstructureinBangladeshisnotsuitableforresistancestohavestablejobs.Besides,thesincerereligiousbeliefsbyresistancesandthestablelifestylesletthemdon’twanttomoveanymore.Perhapstherearesomeotherreasons:governmentlaborregulations,policies,cultureandsoonarelimitingthemtomobilityandchange.Thelackofnaturalresources,Infrastructuresuchaselectricpower,telecommunications,transportation,portsandsoonarefallingbehind.Economicfoundationisweak,thelowlevelofproductivity,irrationalindustrialstructureandstructuralcontradiction,Governmentsatalllevelscorruptions./scope/Bengali.html

Therefore,inordertorealizethesustainableeconomicgrowth,thenoutofpovertyoftheunderdevelopmenttrapisabigchallengeforBangladesh.Abouttheindebtedness,asaLDC,Bangladeshishelpedbysomeinternationalinstitutionsandsomecountries.October30,2008WorldBankthisweekdecidedtoprovide1billion30milliondollarstoBangladeshininterest-freeloansof40years,tohelpthegovernmentbecauseofrisingfoodpricestoalleviatethepressureincreaseofbudget,ensurethesocialsecurityplantocontinuetoimplement./chinese/News/fullstorynews.asp?newsID=10674

TheJapanesegovernmentin25,exchangedfileswithBangladeshgovernment,decidedtoaidBangladeshaftertheflood,providingreconstruction6.96billionyen(or0.465billionRMB)loans

MultinationalsfirmonLDCs

Multinationalfirmsarecompanieswhichproduceproductsinmorethanonecountry.,<Economics2:theworldeconomy>p147

havingbranchesinvariouscountries,includingUK,USareIBM,Dell,HP,VichyandJoh